Harrigill v. United States

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
May 31, 2005
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk

No. 04-60684

SUSAN C HARRIGILL

Plaintiff - Appellee

v.

UNITED STATES OF AMERICA

Defendant - Appellant

Appeal from the United States District Court
for the Southern District of Mississippi

Before KING, Chief Judge, and BARKSDALE and STEWART, Circuit
Judges.

KING, Chief Judge:

The government appeals from the district court’s grant of

summary judgment in favor of Susan Harrigill on her claim for a

tax refund. Because we find that the district court erred in

granting summary judgment for Harrigill, and because the

government is entitled to judgment as a matter of law, we VACATE

the judgment and REMAND to the district court with instructions

to enter judgment for the government.

I. FACTUAL AND PROCEDURAL BACKGROUND

On April 15, 1995, Plaintiff-Appellee Susan Harrigill filed

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a Form 4868 application for an automatic four-month extension of

time for filing her 1994 income tax return. The extension

application stated that her estimated tax liability for 1994 was

$91,109, her payments to date were $11,609, and the balance due

was $79,500. The Form 4868 was accompanied by a check for

$79,500 to the Internal Revenue Service (the “IRS”). At the

expiration of the four-month extension period, Harrigill filed a

Form 2688 application for an additional two-month extension,

which the IRS granted. However, Harrigill did not file her 1994

tax return by the extended due date in October 1995.

On February 23, 1998, more than two years after the

expiration of the extension period, the IRS sent Harrigill a

notice requesting that she file her 1994 tax return. The notice

advised Harrigill that she had a credit balance of $84,720 and

instructed her to file a return if she wanted a refund or an

application of the credit to another tax year. Harrigill’s

accountant responded with a letter indicating that she would seek

an application of the credit.

On September 18, 1998, Harrigill filed her 1994 tax return.

In the return, Harrigill claimed that she had made payments

totaling $91,109, which included the $79,500 that she had sent to

the IRS with her Form 4868. The $79,500 was listed on Line 57 of

the return as an “[a]mount paid with Form 4868 (extension

request).” Harrigill claimed that she had overpaid her taxes for

1994, and she requested that $61,741 of the overpayment be

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applied to her estimated taxes for 1995. The IRS treated the

1994 return as a timely-filed administrative request for credit

of an overpayment.1 After applying the appropriate amount of

Harrigill’s payments to her 1994 tax liability, the IRS complied

with Harrigill’s request and transferred the amount overpaid

($61,741) as a credit to her estimated taxes for 1995.

Harrigill also missed the due date to file her 1995 tax

return. On or before April 15, 1996, Harrigill submitted a Form

4868 application for a four-month extension to file her 1995

return. She subsequently filed a request for an additional two-

month extension, which was granted, making her 1995 tax return

due on October 15, 1996. However, she did not file her 1995 tax

return until December 4, 2000. Harrigill’s 1995 return showed

the $61,741 credit carried forward from the 1994 return,

estimated an overpayment of $62,791, and requested that the

overpayment amount be applied as a credit to her estimated tax

for 1996.2

The IRS denied Harrigill’s request for application of credit

to her 1996 taxes on the ground that 26 U.S.C. § 6511(b)(2)(A)

limited the amount of the credit application to the amount of

1
Even though Harrigill’s 1994 tax return itself was not
timely, the government concedes that an untimely return can, and
did in this case, function as a timely administrative claim for
refund or application of credit.
2
The government also concedes that Harrigill’s 1995 tax
return, like her 1994 tax return, functioned as a timely
administrative claim for refund or application of credit.

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taxes that Harrigill had paid within the three and a half years

prior to her filing of her 1995 return on December 4, 2000.

Because Harrigill had not paid any taxes within that period, the

IRS determined that the maximum amount of the credit was zero.

Harrigill filed suit in the United States District Court for

the Southern District of Mississippi, seeking a refund of

$62,568. The government moved for summary judgment, arguing,

inter alia, that Harrigill’s recovery was capped at zero by the

§ 6511(b)(2)(A) look-back period because she had not paid any

taxes within the three and a half years prior to filing her

claim. Harrigill responded that § 6511(b)(2)(A) did not bar her

claim because her $79,500 remittance towards her estimated 1994

liability was a “deposit” and not a “payment.” She further

argued that it became a payment only when she filed her 1994 tax

return in September 1998. Thus, she claimed that because she

“paid” her taxes in September 1998, she had paid sufficient taxes

within the relevant look-back period (between June 4, 1997 and

December 4, 2000).

The district court agreed with Harrigill and denied the

government’s motion for summary judgment. The court found that

Harrigill’s April 15, 1995 remittance of $79,500 accompanying her

extension application was a “deposit” rather than a “payment.”

Specifically, the court found that Harrigill’s intent revealed

that her remittance was a deposit under the fact-and-

circumstances approach taken by the Tax Court in Risman v.

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Commissioner, 100 T.C. 191 (1993). The district court noted

Harrigill’s explanation that she made the remittance because she

was having difficulties with her business partner (who was also

her ex-husband), and she feared that she might not have the funds

to pay her taxes in the future. The court also construed the

IRS’s February 23, 1998 letter, which requested that Harrigill

file her 1994 return and noted that she had a credit balance, as

signifying that the IRS considered the remittance to be a deposit

rather than a payment.

Harrigill subsequently filed her own motion for summary

judgment, and the government renewed its motion for summary

judgment. The district court declined to consider the

government’s renewed motion and instead granted summary judgment

in favor of Harrigill. The district court entered judgment for

Harrigill and granted her a refund for an overpayment of $62,586

plus interest running from December 4, 2000. The government now

appeals from that judgment.

II. DISCUSSION

This court reviews a grant of summary judgment de novo,

applying the same standard as the district court. Perez v.

United States, 312 F.3d 191, 193 (5th Cir. 2002) (per curiam).

Summary judgment is proper when the record, viewed in the light

most favorable to the nonmoving party, demonstrates that no

genuine issue of material fact exists and that the movant is

entitled to judgment as a matter of law. See FED. R. CIV. P.
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56(c); see also Blow v. City of San Antonio, 236 F.3d 293, 296

(5th Cir. 2001). “The moving party is entitled to a judgment as

a matter of law [if] the nonmoving party has failed to make a

sufficient showing on an essential element of her case with

respect to which she has the burden of proof.” Celotex Corp. v.

Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks

omitted). In this case, neither party argues that there is a

question of fact; both parties argue that they are entitled to

judgment as a matter of law.

In the present case, Harrigill challenges the IRS’s denial

of her claim for application of credit from her overpayment of

her 1995 taxes to her 1996 tax liability. She filed this claim

with the IRS on December 4, 2000, when she filed her 1995 tax

return claiming an overpayment of her 1995 taxes and requesting

that the overpayment be applied to her 1996 tax liability. As

the Supreme Court has stated:

Internal Revenue Code § 6511(b)(2)(A) imposes a ceiling
on the amount of credit or refund to which a taxpayer is
entitled as compensation for an overpayment of tax:
“[T]he amount of the credit or refund shall not exceed
the portion of the tax paid within the period,
immediately preceding the filing of the claim, equal to
3 years plus the period of any extension of time for
filing the return.”

Baral v. United States, 528 U.S. 431, 432 (2000) (quoting 26

U.S.C. § 6511(b)(2)(A)) (alteration in original).3 Because

3
Section 6511(b)(2)(A) provides in full:

(2) Limit on amount of credit or refund.--

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Harrigill received a four-month extension and then an additional

two-month extension to file her 1995 tax return, the applicable

look-back period under § 6511(b)(2)(A) runs three years and six

months back from the date that she filed her claim. Accordingly,

Harrigill’s recovery is limited to the portion of the tax that

she paid during the period running from December 4, 2000 back to

June 4, 1997.

The pertinent question here is whether Harrigill paid any of

the taxes that she seeks to recover during the applicable look-

back period. For the purposes of § 6511(b)(2)(A), a payment of

estimated tax is deemed to have been made on the due date of the

tax return for that year. See 26 U.S.C. § 6513(b).4 Thus, the

(A) Limit where claim filed within 3-year
period.--If the claim was filed by the
taxpayer during the 3-year period prescribed
in subsection (a), the amount of the credit or
refund shall not exceed the portion of the tax
paid within the period, immediately preceding
the filing of the claim, equal to 3 years plus
the period of any extension of time for filing
the return. If the tax was required to be paid
by means of a stamp, the amount of the credit
or refund shall not exceed the portion of the
tax paid within the 3 years immediately
preceding the filing of the claim.
4
Section 6513(b) provides:

(b) Prepaid income tax.--For purposes of section 6511 or
6512--

(1) Any tax actually deducted and withheld at
the source during any calendar year under
chapter 24 shall, in respect of the recipient
of the income, be deemed to have been paid by
him on the 15th day of the fourth month
following the close of his taxable year with
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government argues that under § 6513(b), the taxes that Harrigill

seeks to recover were deemed paid on April 15, 1996.5

Accordingly, the government contends that Harrigill made no

payment within the applicable look-back period and that she is

therefore barred from recovery.

Harrigill argues that the district court properly granted

summary judgment in her favor. Specifically, she claims that the

district court properly determined that under the Risman facts-

and-circumstances test, her April 15, 1995 remittance of $79,500

towards her estimated 1994 liability, which accompanied her Form

respect to which such tax is allowable as a
credit under section 31.

(2) Any amount paid as estimated income tax
for any taxable year shall be deemed to have
been paid on the last day prescribed for
filing the return under section 6012 for such
taxable year (determined without regard to any
extension of time for filing such return).

(3) Any tax withheld at the source under
chapter 3 shall, in respect of the recipient
of the income, be deemed to have been paid by
such recipient on the last day prescribed for
filing the return under section 6012 for the
taxable year (determined without regard to any
extension of time for filing) with respect to
which such tax is allowable as a credit under
section 1462. For this purpose, any exemption
granted under section 6012 from the
requirement of filing a return shall be
disregarded.
5
Harrigill’s 1995 taxes were paid by withholdings and by
her request, on her 1994 return, that the overpayment of her 1994
taxes be credited to her estimated taxes for 1995. Thus,
according to the government, the withholdings were deemed paid on
April 15, 1996 under § 6513(b)(1), and the estimated taxes were
deemed paid on April 15, 1996 under § 6513(b)(2).
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4868, was a “deposit” and not a “payment.”6 She claims that

because that remittance is properly viewed as a deposit,

§ 6513(b) does not deem her payment to have been made on April

15, 1996 because § 6513(b) is applicable only to payments of

estimated taxes, not to deposits. Therefore, she claims that she

paid her 1994 taxes on September 18, 1998, when she filed her

1994 tax return. Accordingly, she argues that she paid

sufficient taxes within the relevant look-back period. The

government responds that the district court erred in

characterizing Harrigill’s remittance as a deposit because

remittances made with Form 4868 extension applications should be

considered payments as a matter of law and that the Risman

court’s facts-and-circumstances approach is erroneous.7

We find it unnecessary, however, to decide whether

6
We note that after the Supreme Court decided Rosenman
v. United States, 323 U.S. 658 (1945), the Fifth Circuit adopted
the rule that all remittances were deemed deposits, and not
payments, until an assessment of liability had been made. See,
e.g., Thomas v. Merchantile Nat’l Bank, 204 F.2d 943, 944 (5th
Cir. 1953); Ford v. United States, 618 F.2d 357, 358-61 (5th Cir.
1980). However, both parties agree that this line of authority
recently has been abrogated by Baral, 528 U.S. at 435-39, in
which the Supreme Court rejected the notion that a remittance is
never a payment until an assessment has been made.
7
A number of other courts have adopted the government’s
position. See, e.g., Dantzler v. I.R.S., 183 F.3d 1247 (11th
Cir. 1999); Ertman v. United States, 165 F.3d 204, 207 (2d Cir.
1999); Ott v. United States, 141 F.3d 1306, 1309 (9th Cir. 1998);
Gabelman v. Commissioner, 86 F.3d 609, 611-12 (6th Cir. 1996);
see also VanCanagan v. United States, 231 F.3d 1349, 1352-54
(Fed. Cir. 2000) (pretermitting the question of whether a Form
4868 remittance is always a payment under § 6513(b) because the
facts and circumstances of the remittance demonstrated that the
remittance clearly was a payment).
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Harrigill’s remittance accompanying her Form 4868 application was

a deposit or a payment as a matter of law. Regardless of whether

the remittance accompanying the April 15, 1995 Form 4868 was a

deposit or a payment, we agree with the government that

Harrigill’s application of credit to her 1995 taxes, which she

requested in her 1994 tax return filed in September 1998,

constituted a payment of her estimated 1995 taxes, not a deposit.

The government points to 26 U.S.C. § 6402(a), which confers broad

authority on the IRS to credit any overpayment against any

outstanding liability. More specifically, § 6402(b) authorizes

the IRS to credit overpayments against the estimated tax for a

succeeding tax year pursuant to procedures established by

regulation. The relevant regulations indicate that applications

of overpayment credit are deemed payments of estimated income

tax. For example, 26 C.F.R. § 301.6402-3(a)(5) provides:

A properly executed individual . . . original income tax
return or an amended return . . . shall constitute a
claim for refund or credit within the meaning of section
6402 and section 6511 for the amount of the overpayment
disclosed by such return (or amended return). . . . A
return or amended return shall constitute a claim for
refund or credit if it contains a statement setting forth
the amount determined as an overpayment and advising
whether such amount shall be refunded to the taxpayer or
shall be applied as a credit against the taxpayer's
estimated income tax for the taxable year immediately
succeeding the taxable year for which such return (or
amended return) is filed. If the taxpayer indicates on
its return . . . that all or part of the overpayment
shown by its return . . . is to be applied to its
estimated income tax for its succeeding taxable year,
such indication shall constitute an election to so apply
such overpayment, and no interest shall be allowed on
such portion of the overpayment credited and such amount

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 shall be applied as a payment on account of the estimated
income tax for such year or the installments thereof.

(emphasis added). Moreover, § 6513(d) also supports the

conclusion that Harrigill’s application of credit from her 1994

taxes to her 1995 taxes was a payment of her estimated 1995

taxes:

(d) Overpayment of income tax credited to estimated
tax.--If any overpayment of income tax is, in accordance
with section 6402(b), claimed as a credit against
estimated tax for the succeeding taxable year, such
amount shall be considered as a payment of the income tax
for the succeeding taxable year (whether or not claimed
as a credit in the return of estimated tax for such
succeeding taxable year), and no claim for credit or
refund of such overpayment shall be allowed for the
taxable year in which the overpayment arises.

26 U.S.C. § 6513(d) (emphasis added). Furthermore, Harrigill’s

application of credit from her 1994 taxes to her 1995 taxes

clearly was not a deposit as contemplated by IRS procedure. See,

e.g., Rev. Proc. 84-58, 1984-33 I.R.B. 9.8 In Gabelman, the

Sixth Circuit concluded that the Form 4868 remittance was not a

deposit under this procedure because the IRS had not challenged

the taxpayer’s determinations and representations and because the

taxpayer therefore had not submitted the remittance in an effort

to stop any penalties from accumulating. Gabelman v.

Commissioner, 86 F.3d 609, 612-13 (6th Cir. 1996); see also

Baral, 528 U.S. at 439 n.2 (describing deposits as “remittances

of any sort of tax by a taxpayer under audit in order to stop the

8
We note that on March 28, 2005 (after the time of the
events relevant to this appeal), Rev. Proc. 2005-18, 2005-13
I.R.B. 798, was published, superceding Rev. Proc. 84-58.
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running of interest and penalties”). Similarly, Harrigill did

not apply the credit from her 1994 taxes to her 1995 taxes to

stop penalties from accruing in relation to an IRS challenge of

her determinations and representations. Thus, we agree with the

government that Harrigill’s application of credit to her 1995

taxes was a payment of her estimated 1995 income tax, as opposed

to a deposit.

Harrigill also argues that § 6513(b) does not apply here

because that subsection is entitled “Prepaid income tax.” She

asserts that the provision therefore applies only to situations

in which the taxpayer makes the payment before the due date of

the tax return. Accordingly, she argues that if the IRS is

correct that she paid her 1995 taxes in September 1998 by filing

her 1994 tax return seeking application of credit, her payment

was not for “prepaid income tax” because April 15, 1996 had

already passed. We are unconvinced by Harrigill’s argument. The

sole basis of her argument is the heading of § 6513(b). However,

we need not turn to the statute’s heading because the text is

unambiguous--it clearly applies to “[a]ny amount paid as

estimated income tax for any taxable year . . . .” 26 U.S.C.

§ 6513(b)(2); see also United States v. Carrillo-Colmenero, 523

F.2d 1279, 1283 (5th Cir. 1975) (“Since the text of the statute

is plain and unambiguous, there is no call to resort to its

heading to aid in construing it.”); Hodges v. United States, 223

F.2d 140, 145 (5th Cir. 1955). Furthermore, we note that the

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Second Circuit has rejected a similar argument regarding the

title of § 6513(b) on a number of grounds. See Ertman v. United

States, 165 F.3d 204, 208 (2d Cir. 1999). Thus, we are persuaded

that § 6513(b) applies to Harrigill’s application of credit to

pay her estimated 1995 tax.

For the purposes of § 6511(b)(2)(A), Harrigill’s payment of

her estimated 1995 income tax is statutorily deemed by § 6513(b)

as having been made on the due date of the return without

extension, i.e., on April 15, 1996. See 26 U.S.C. § 6513(b);

Baral, 528 U.S. at 433-35. Because this date falls outside of

the look-back period of December 4, 2000 to June 4, 1997

calculated above, none of the taxes that Harrigill seeks to

recover were paid within the applicable look-back period under

§ 6511(b)(2)(A). Harrigill’s recovery therefore is limited by

statute to zero, and the government is entitled to judgment as a

matter of law.

III. CONCLUSION

For the reasons stated above, we VACATE the judgment of the

district court and REMAND this case to the district court with

instructions to enter judgment in favor of the government. Costs

shall be borne by Harrigill.

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